8 April 2011 Internal T.I. 2011-0395571I7 - Special Workplace Designation

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether certain employment would be considered employment at a special work site for purposes of subsection 6(6) of the Income Tax Act.

Position: It is a question of fact, but in this situation no.

Reasons: employment is not temporary

XXXXXXXXXX
			2011-039557
			Linda Compton
			(613) 957-2135

April 8, 2011

Dear XXXXXXXXXX :

Re: Technical Interpretation Request - special work site

This is in response to your letter of February 9, 2011 requesting our opinion as to whether the special work site provisions subsection 6(6) of the Income Tax Act (the "Act") would apply in a particular situation. You have provided the job posting and job description for the Executive Director position in your XXXXXXXXXX .

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advanced Income Tax Rulings", dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the internet at http://www.cra-arc.gc.ca. Where the particular transactions are complete, the inquiry should be addressed to the relevant tax services office, a list of which is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following comments in respect of the issues that you raised. Please note, however, that these comments are of a general nature only and are not binding on the CRA.

An employee's expenses for accommodation or for transportation from home to the workplace are personal expenses. Generally speaking, whenever an employer pays or subsidizes an employee's personal expenses, the amount is a taxable benefit and is required to be included in income from employment under subsection 6(1) of the Act. However, subsection 6(6) of the Act establishes an exception for situations in which board and lodging and certain transportation expenses are paid by an employer in respect of employment at a "special work site" or a "remote work location". As you are specifically interested in the special work site exclusion, we will limit our comments to this aspect of subsection 6(6) of the Act.

Interpretation Bulletin IT-91R4, Employment at Special Work Sites or Remote Work Locations, ("IT-91R4") discusses the requirements that an individual must meet in order to exclude from income the value of a benefit or reasonable allowance for board and lodging expenses and transportation to and from the particular work location incurred in respect of employment at a special work site.

For the special work site exclusion to apply, all of the following requirements must be met:

a) The duties of the office or employment performed by the individual at the work location must be of a "temporary nature";
b) Throughout the period that the individual performed the duties of the office or employment at the work location, the individual must maintain at another location a self-contained domestic establishment as the his or her principal place of residence, which was available for the individual's occupancy and not rented by the individual to any other person;
c) The distance between the individual's principal place of residence and the work location must be such that the individual cannot reasonably be expected to commute daily ; and
d) The period the individual is required to be away from the principal place of residence at the work location because of the duties of the office or employment must be at least 36 hours.

With respect to the requirements noted above, you have specifically identified the issue of whether the duties of employment are of a temporary nature. Our discussion will focus on this requirement.

Paragraph 5 of IT-91R4 indicates that the expression "duties performed by the taxpayer were of a temporary nature" as used in subparagraph 6(6)(a)(i) of the Act refers to the duration of the duties performed by the individual employee, not the expected duration of the project as a whole. For example, a project might take ten years to complete but the individual's duties at that project might take only a few months.

As noted in paragraph 6 of IT-91R4, the term "temporary" is not defined in the Act. However, as a general rule, duties will be considered to be of a temporary nature if it can reasonably be expected that they will not provide continuous employment beyond a period of two years. The determination of the expected duration of employment must be made on the basis of the facts known at its commencement and consideration should be given to the following factors:

• the nature of the duties to be performed by the employee (certain types of work are, by their nature, short term engagements, such as repair work or trades which are involved only during a certain phase of a project);
• the overall time estimated for a project, or a particular phase of a project, on which the employee is engaged to perform duties; and
• the agreed period of time for which the employee was engaged according to the employment contract or other terms of the engagement.

While the application of subsection 6(6) of the Act is a question of fact that can only be determined on a case-by-case basis, based on our understanding of the facts in this situation it appears that the duties of the Executive Director are not intended to be of a temporary nature. A review of the job posting and the job description that you provided clearly indicates that the nature of the position itself and the employment of the particular individual is full-time and permanent. As such the required conditions of subsection 6(6) of the Act are not met and would not be applicable to this situation.

We trust that these comments will be of assistance.

Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch